Hong Kong Budget 2024: City’s economy grew by 3.2% last year, inflation ‘moderate’


Hong Kong Budget 2024: City’s economy grew by 3.2% last year, inflation ‘moderate’

Hong Kong’s economy grew by 3.2 per cent in 2023 after the city lifted stringent Covid-19 restrictions, but the “difficult external environment” continued to limit the pace of growth, the city’s finance chief has said.

Finance Secretary Paul Chan arrives at the Legislative Council Chamber to deliver the 2024 budget on February 28, 2024. Photo: Kyle Lam/HKFP.

Economic activity in Hong Kong showed an immediate improvement after anti-epidemic measures were axed early last year, Financial Secretary Paul Chan said on Wednesday when he presented the annual budget for the next fiscal year in the legislature.

The income of the general public grew last year, Chan said, while private consumption expenditure increased by 7.3 per cent with the support of the consumption voucher scheme and initiatives including “Happy Hong Kong” and “Night Vibes Hong Kong,” the minister said.

‘Moderate’ inflation

Inflation in Hong Kong remained moderate in overall terms, Chan said on Wednesday, with the inflation rate standing at 1.7 per cent last year after excluding the effects of one-off government measures.

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“While prices of individual items such as energy, clothing and footwear, as well as meals out and takeaway food, rose visibly, price pressures faced by other major components were largely contained,” he said in Cantonese.

Hong Kong growth forecast

The finance minister predicted that Hong Kong’s economy will grow between 2.5 to 3.5 per cent in the upcoming fiscal year, taking into account the global financial situation and China’s expected growth.

Made with Flourish

International trade and capital flows would continue to be affected by geopolitical tensions, Chan said, while the growth rate of advanced economies would be constrained by the “sharply tightened financial conditions” over the past two years.

China is expected to record economic growth this year, with its measures for boosting the economy “progressively taking effect,” Chan said. The US economy may record slower growth compared to last year due to the effects of rate hikes, but the economy would receive some support if the Federal Reserve begins reducing interest rates, he said.

Made with Flourish

Although Hong Kong’s export of goods would continue to feel pressure from the external environment, performance may improve as the global financial situation may “ease progressively” over the course of the year, Chan said.

The financial chief predicted that Hong Kong will see more visitors in the coming year, thus boosting the growth in the export of travel and other related services. The income of the general public is also expected to rise, which will support private consumption, he said.

‘Solid development’

The city’s economy will see “sustained and solid development” in the medium-term despite geopolitical tensions and the expansionary fiscal and monetary policies adopted by most economies, Chan said.

Finance Secretary Paul Chan delivers the 2024 budget on February 28, 2024.
Finance Secretary Paul Chan delivers the 2024 budget on February 28, 2024. Photo: Kyle Lam/HKFP.

The finance chief vowed that Hong Kong would have “ample room to grow” with China’s focus on promoting high-quality development. The city would continue to leverage its unique advantages under One Country, Two Systems and proactively integrate into the overall national development, Chan said.

“[Hong Kong] continues to perform the role of an important node in the domestic and international dual circulation of our country,” he said.

Hong Kong Budget 2024 in full:

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